Author: Jasper Tax

The Internet of Things (IoT) is getting more and more prevalent in our daily lives. Smart thermostats allow us to remotely control the temperature in our homes, Philips Hue bulbs light up automatically when we come home and change their colors dependent on the environment. But the Internet of Things is not only limited to consumer products, as research shows that businesses will become the top adopter of IoT solutions. Companies can use these solutions to improve their bottom line in three ways: they can lower operating costs; increase productivity; and expand to new markets or develop new product offerings.

John Deere did the latter, by using the IoT to completely transform their business model. Traditionally John Deere is a manufacturer of farming equipment, producing products like tractors and plows for farmers. In this business model, the revenue is generated at a single point in time, at the moment of the sale. John Deere was looking for ways to change their business model and extend their products and service offering, allowing for a more constant flow of revenue from a single customer. The IoT allows them to do just that.

The ability to connect their products and exchange data between them allows John Deere to create an entire ecosystem of smart products. Farm equipment, irrigation systems, speed optimization systems and weather data systems will be connected to the farm management system through IoT technology. This ecosystem helps farmers to gain insight into their current operations and manage their farms more proactively. Not only do farmers reap benefits from this approach, John Deere does so too. By creating an entire ecosystem, John Deere extends their offering beyond products into delivering services. Moreover, only allowing John Deere products access to the ecosystem creates a buyer lock-in for the farmers. Once they own John Deere equipment and make use of their services, it will be very expensive to switch to another supplier, thus strengthening John Deere’s strategic position.

References:
http://www.businessinsider.com/how-the-internet-of-things-market-will-grow-2014-10?international=true&r=US&IR=T
http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/an-executives-guide-to-the-internet-of-things
https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition

Last September, the Dutch online food ordering giant TakeAway.com went public at €23,50 a share, raising a total of 328 million euros. TakeAway.com is active in nine countries, best known in their home country, the Netherlands, with their brand ThuisBezorgd.nl. Today, the company has become an essential part of the lives of thousands of customers throughout Europe. By offering a platform where food delivery companies can offer their services to customers, TakeAway.com simplifies the food ordering experience and delivers value to their customers.

But how has this company been able to be this successful? First we’ll take a look at the market situation prior to the launch in the year 2000. At that time, the availability of ordering services was sparse and fragmented. There was no easy way to create an overview of the available services at a certain location. Often, the ordering of food involved calling several companies to compare their services and place an order. At the same time, the rise of the internet opened up a myriad of technological possibilities for companies to generate new business opportunities. Paying attention to both the need for an improved food ordering experience as well as the opportunities of the technological advances of the internet, the founder of TakeAway.com saw an opportunity to reinvent the current food delivery industry.

By launching an online platform where vendors can offer their services to potential customers on hand and customers are offered an integrated and hassle-free experience of ordering food on the other hand, TakeAway.com offers a unique service. Since TakeAway.com was (one of) the first entrant(s) in the online food delivery market, they managed to attract a significant number of customers that use their service. The access to many potential customers increased the attractiveness of the service to food vendors, allowing TakeAway.com to ask as much as a 10% commission on placed orders. The addition of TakeAway.com as a third party in the food delivery service market combined with their unique service changed the entire industry.

References:
https://www.nrc.nl/nieuws/2016/09/30/beursgang-takeaway-levert-328-miljoen-euro-op-a1524110
https://nl.wikipedia.org/wiki/Takeaway.com